PUB owners have cast doubts on Prime Minister Andy Burnham’s 20% cut to business rates for pubs, clubs, and live music venues in England, saying it “won’t make any material difference”.
The discount will apply to nearly 32,000 hospitality businesses from April next year, and is expected to save a typical pub some £1100 annually, but will not be available to the very largest live music venues.
The new policy will be funded through a review of reliefs for businesses that “do not make a positive contribution to local communities”, such as vape shops, and a crackdown on online marketplaces that do not comply with tax obligations, No 10 said.
A hotel owner has said the cut to business rates “won’t make any material difference” after the rates were re-evaluated and increased for some in April.
Asked about the new policy, Steve Perez, who owns two hotels, both including a pub and a restaurant, told BBC Radio 4’s Today programme: “Our business rates went up to about 130% (in April).
“So this tiny – well, obviously it’s welcome, £1000 – but this won’t make any material difference to any pub.
“And it’s interesting to know that they haven’t talked about restaurants and hotels because bear in mind most pubs these days serve food, many pubs also have accommodation.
“And we’ve had increases in national insurance, we’ve had the EPR, the tax no one’s ever heard of – extended producer responsibility.
“And it’s a little bit like the supermarkets putting up the prices and then saying they’ve reduced them.”
Some hospitality owners have also brought into question the number of venues the new policy will actually apply to.
Iain Hoskins, owner of Ma Pub Group in Liverpool, told the Today programme that when a 15% cut was announced last year, only one of his five venues qualified “because they didn’t have the word pub in their name”.
“They were a cafe bar, which was a posh pub, but they were a pub, you know, nonetheless.”
Hoskins said his bill was between £200,000 and £300,000 across his venues.
He added: “I don’t want to sound ungrateful, but the increases were so huge last year that now we’re sort of chipping away at some of those increases.
“We’re not actually … getting better value than we had before. We’re still having to find extra money for these business rates.
“But you know, it is a relief that actually some of that is mitigated quickly, 20% isn’t an insignificant figure.”
The question of VAT cuts across the hospitality industry was also raised again following the Prime Minister’s announcement.
Perez said: “I mean, what hospitality is campaigning for right now is a cut in VAT.
“Ireland has just cut VAT to 9%, Andy Burnham said prior to being Prime Minister he would support a cut in VAT.
“That will make a difference. That will mean we can invest in our businesses. That will mean we can employ more people.
“That will mean we’ll pay more corporation tax, which I think every business is happy to pay more tax if we make more money.
“But, these business rates, we have to pay before we even open the doors.”
Emma McClarkin, chief executive of the British Beer and Pub Association, welcomed the Government’s “sorely needed discount”, saying it will be “celebrated” by pubs across England.
She said: “For years and years, pubs have paid a disproportionately higher rate which has ground down their ability to keep the doors open, so we’re delighted that after working with Andy Burnham’s team prior to his election as Labour Party leader, he has swiftly acted on our concerns and provided new backing to our nation’s pubs as he promised.
“The local has and always will be more than just a place to get a pint; it creates jobs, it’s our nation’s living room, it’s the anchor of the high street, so this sorely needed discount will be celebrated by pubs up and down the country.
“We now look forward to working with Government to deliver permanent business rates reform so we can keep the pub in its rightful place; at the heart of our communities.”
